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The World Bank has indicated that the Akufo-Addo government was forced to pay the former president John Mahama’s power purchasing agreements, which greatly worsened the nation’s economic problems.
The administration of the former President entered into take-or-pay contracts, obligating Ghana to fork over billions of cedis for extra energy that it does not use.
The Mahama administration’s signing of such a pricey take-or-pay agreement at the end of the rule aroused eyebrows in Ghana and internationally for a government that had failed to collect enough money to pay for the country’s electricity needs, sending the nation into nearly five years of dumsor.
“In the aspect of Ghana, those contracts you signed with the PPA are too expensive’, World Bank Country Director Mr. Pierre Frank Laporte told Joy News of the contract signed by the Mahama administration.
“The kind of PPA you signed, it means Ghana is paying for electricity not in use through doubling of capacity.”
“The fact is, in the last few years, Ghana entered into some PPAs that were wrong. These types, in our view, were at the wrong rate and at the wrong prices and today you’re paying duly for it. And today the country is being billed for many of these wrong PPAs.”
So far, the government has paid a whopping 12 billion to service this automatic debt as a result of the inescapable nature of the agreement, and with the country having to continue paying, the World Bank Director called for an urgent review and backed steps the government has taken for a review of the deal.
“I know that the government has started some talks with the IPPs to renegotiate some of these PPAs,” he said.
NKONKONSA.com
